Incentives approved for OSU project

In July, the City of Powell approved a pre-annexation agreement with The Ohio State University for approximately 30 acres of land north of Home Road and east of Sawmill Parkway that got the ball rolling for a medical campus to be built. Part of the enticement of the Powell location for the university stemmed from a trio of incentive agreements between the two sides, which were approved at a recent Powell City Council meeting on Nov. 20.

Under the first incentive, 50 percent of the city income taxes paid by employees of the medical facilities will be paid back to OSU over a 15-year period. However, the incentive will not kick in until the first year following the date when at least $25 million in payroll is located on the property.

As part of that incentive, OSU will also receive 100 percent of the income taxes paid by temporary construction employees for an 18-month period beginning on the first day income taxes are collected from those employees.

Both parts of the incentive are based on the city’s current 0.75 percent income tax rate and will remain so regardless of any potential future rate increases.

The second incentive involves the installation of the sanitary sewer system on the site. Under the agreement, the city, Delaware County, and OSU will share the cost of the installation. The estimated cost is $900,000, and the city’s contribution will be capped at no more than $300,000.

With the third incentive, the city will reimburse OSU $650,000 for street infrastructure costs for the access roads on Sawmill Parkway and Home Road. Along with the sewer installation, this incentive will be paid for with funds from the Sawmill Parkway TIF, and not the city’s general fund.

Powell Law Director Gene Hollins said the sewer installation incentive will not kick in until the second phase of the medical campus is ready to be constructed as there are sufficient sewer services available already for the first phase.

The street infrastructure incentive will not be required to be paid until 2023 at the earliest, when the appropriate TIF funds will be available.

Hollins said the terms of the incentives are consistent with where the city originally felt they would need to be, based on what OSU was asking for, in order to be considered as a location for the new medical campus.

Vice Mayor Tom Counts cautioned council that while everyone agrees the medical facilities are a great opportunity for the city, the project will not generate money for the city for quite some time because of the reimbursements and the inability to project the type of revenues the facilities will generate.

Counts projected the city’s “break-even point” on the project could be anywhere from five to 10 years from now, and he added, “I don’t want our residents to think that this is the bonanza that we have been waiting for that this is going to solve all of our economic problems. We still have a short-term problem with infrastructure.”

Mayor Jon Bennehoof agreed, saying, “I am very eager about this opportunity for the city, a long-term partnership is significant. We do have a (short-term) issue … we have to get to a solution for that short-term infrastructure problem. OSU would never solve that problem, and we wouldn’t look for them to solve that problem.”

He added, “(OSU) would contribute long-term and the supply chain or other development that will come to that area will be significant, so that will help us as well, but that also will not solve our infrastructure problem.”

Councilman Daniel Swartwout pointed out the impact of the medical campus will extend far beyond dollars and cents, saying, “We’ve all been focusing on the economic aspects of this development and obviously, that’s important. That has to be front and center, and that has to be a serious consideration. But what we haven’t talked about tonight are the benefits for our residents beyond the economic benefits — the benefits of having a world-class medical facility right in our community … the benefits for the health and well-being of the community are tremendous and shouldn’t go without being commented on.”

A separate ordinance for the annexation of the land into the city of Powell was on the agenda, but it was tabled until the Jan. 15 council meeting, per the request of OSU. Aaron Underhill, the attorney representing OSU, said the request to delay the annexation was not in any way indicative of problems with the project, and he anticipated they would be ready to move forward in the coming weeks.